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It is sometimes forgotten but the euro system has also delivered prosperity and stability even though current times are turbulent. Severe mismanagement by national politicians, utilizing the system to its extremes and outside of reasonable and even legal boundaries, is not good argument for the failure of the system. We have to fix this together.

Boone and Johnson's view of the reasons why countries like Spain or Greece need a nominal adjustment is too narrow: Even if those countries had a balanced current account, a nominal adjustment by exiting the euro zone and devaluing or by ECB-led inflation would be necessary. The reason is that the "outflow of gold" that would have led one to worry about current account deficits in the gold standard days can and does happen internally without any cross-border transactions being involved: disintermediation in the financial system reduces the velocity of money and increased demand for holding money balances ("Hiding euro notes under the mattress") increases the need for base money. If that need for a higher money supply to enable the same number of economic transactions as before is not accommodated by the central bank, the economic activity in the country will drop no matter what the current-account deficit is.

However, the policy conclusions are the same: the ECB needs to start doing its job and increasing the money supply/inflation to make enough liquidity available to enable growth in ALL EUROZONE countries and not limit itself to getting it just right for the overheating German economy. Otherwise, all that remains for the affected countries is regaining control over their money supply by leaving the eurozone and thus regaining the ability to make the means for economic transactions (money) less scarce, which is the same as saying that their new currencies will need to be devalued.

So lets not focus on the mere symptom of current-account deficits to critizise the euro system: When Greece leaves it is not to be able to export more stuff but rather to regain control over its monetary system because the ECB with its "lowest inflation ever" pride has failed to use its much-vaunted credibility for the purpose of actually doing its job.

The Eurozone is just another human experiment in the long line of experiments when humans try to establish some kind of limited alliance, a union without a strong foundation, thus the experiment fails and usually ends in a much worse state than the state before the experiment.The greatest such experiment for unity, and equality was the Communist expedient which went much deeper than the Eurozone, since it established a full integration in between social layers and even nations, but it failed and has become the most corrupt human system ever created because it failed to adjust the most important ingredient, human nature.So far all human social systems, civilizations started or ended up with oppression, forcing, threatening, and our civilization has reached this point now. We can see how in Europe democratic institutions are dismantled, people go on the street, and we can see huge social inequality everywhere else, and the Occupy movement gave us a glimpse of things we can expect.We are all subjective, egoistic by inherent nature, with any thought or movement we only serve our self interest, all our calculations are about ourselves.The Eurozone was just the same. And it did not even go deep enough to have any chance how could a financial or even economical Union survive without establishing a common foundation?Today the only option for the survival of the Euro would be full integration in between the participating nations, but people are understandably weary about it following the Communistic example that was not that far away.Whatever we do it has to start with the adjustment of our inherent nature, instead of 100% self serving we need to start considering the whole system first of all, and only then think about ourselves.How could we achieve such a fundamental change without terror, backlash as it happened in Russia?Only through a global, integral education program, providing objective transparent information about the nature of our global, integral system in which we are all interconnected, "sitting on the same boa" to help people understand that our own progress, health and prosperity is completely tied together with the fate, stability and optimal function of the whole system, and we can only get 100% reward for ourselves if the system is perfect.This way we could start building a new fully integrated human system, but not by force or trickery but willingness and free choice.In truth we do not even have a choice, even today we already live in such a system, being slaves to it, but we do not want to acknowledge it and we use our interconnections in a negative way.Through the above mentioned education we could fix our connections and adjust to this global system.

Professors Boone & Johnson may agree with Alex Tsipras that "reducing wages and prices" is a "failing" strategy. Sorry for giving these news, but... unfortunately, within the context of the Euro, it is the ONLY strategy. Exiting the Euro has the same effect, it devalues wages compared to the rest of the world, and sets lower prices compared to rest of the world as well.The beauty of a system where you do not print your own money is that you cannot shove your shortcomings under the rug with internal inflation. You cannot pretend that you are richer than you actually are. The Euro is showing countries like Greece (and others) what they always were: low productivity, low capital, low investment countries, who want to have a social welfare system like Germany's. It does not work; you cannot finance a huge welfare system with one third of German productivity. Greece must make itself more attractive to investors, and for that it must reduce all of its prices, including wages.Exiting the Euro will destroy wealth and destroy savings. Is this really what distinguished economists want for Greece? Do these distinguished economists believe that you can print your way to prosperity? Or do they believe that prosperity ONLY comes from investment and productivity growth?

The euro does not replicate the gold standard. It is in fact closer to gold itself (with Draghi holding a philosopher's stone in his hands).It is a substantial difference, because it means, as said in this article, that there is neither convertibility to suspend, nor currency to depreciate.The standard view on an euro exit suggests that a country would simultaneously introduce a new currency and convert all private and public domestic debts into that currency (which would trigger instant depreciation, and de-facto partial default). This looks complicated and risky (and also increasingly likely).There might be another way that is not much discussed:1. Reduce debts to sustainable levels. It's called a default, and it can be imposed by national debtors, suggested by creditors, or negotiated. What can't be repaid, won't be repaid anyway.2. Introduce a new local currency in small quantities, and at a par with the euro. That's what happens if the government pays some of its expenses with IOUs for example.3. As long as the government remains credible, there would be a fiscal effect (it would spare a few percentages points of austerity) and a monetary effect. Hopefully enough to restore growth and financial viability. Then it would be time to consider the following options: withdraw the new currency, withdraw the euro or retain both.Of course, such a scheme would have better chances to work in a healthier economy (which would not even need to default in the first place). Spain could do it. Why not Germany?It would look more uncertain for Greece. But Greece may have no choice.

Alberto Bagnai, ET AL
want the Greek government to abandon the euro – and all other eurozone members to follow suit.

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